In Thailand, cries of 'Singapore, go home'

Five months after seizing power, Thailand's military rulers have a lot on their plate: battling an escalating insurgency in the Muslim-dominated south, keeping tabs on political troublemakers, and writing a new Constitution.

That's work aplenty, but in recent weeks, their gaze has also lifted toward the heavens, where a cluster of commercial satellites are orbiting. The satellites were part of the telecommunications empire of ousted Prime Minister Thaksin Shinawatra until they were sold last year to Temasek Holdings, an arm of Singapore's government.

Now, the generals want them back.

The satellites have been sucked into an increasingly prickly row over national security and foreign capital in Thailand, fueled by the 1997 Thai economic collapse and the rush by foreigners to buy Thai assets on the cheap in the years since. Thailand's allies are now watching to see how far the military will go to back up its rising tide of nationalist rhetoric with action.

"A lot of foreigners have underestimated the strength of economic nationalism in Thailand,'' says Michael Montesano, an assistant professor of Southeast Asian studies at the National University of Singapore. "Since 1997 Thailand has learned what it feels like to be a South American economy with multinational capital controlling an outsized share of the economy."

Of course the threats to seize Shin Corp., the conglomerate Mr. Thaksin founded, aren't just about economic nationalism. They're also a measure of how consumed the military is by the desire to bury the political career of Thaksin himself, whose $4 billion sale of Shin – which was set up so they didn't have to pay any tax on the proceeds – set the stage for the bloodless military coup that drove him from power. Analysts say the military's attitude appears to be that if they have to alienate a few foreign investors to destroy Thaksin, then so be it.

"The project of this regime is political [and] the political actors behind the project are going to take care of their own self-interesta," says Mr. Montesano.

Much of the heat has been generated by Gen. Sonthi Boonyaratglin, Army chief and coup leader. In mid-February, he vowed to reclaim Shin Satellite, Shin Corp.'s telecommunications subsidiary in order to "salvage the country and its assets." He has also accused the Singaporean government of using the cell phone network to spy on Thailand, a charge they've denied.

Such bellicose talk is galling for Temasek, which bought Shin Corp. in January 2005. Their investment backfired when mass protests against Thaksin led to his removal Sept. 19 and strengthened the hand of those who want to keep national assets in Thai hands.

A criminal investigation is under way into Temasek's use of nominees to skirt limits on foreign ownership. The value of its investment has dropped by about half as investors have dumped Shin-related stocks. In another setback, Thailand's military-installed government said Tuesday it would probably take over iTV, a struggling television station also owned by Shin Corp.

Foreign investors in Thailand are already digesting a series of fumbles by policymakers.

Last December, the government triggered a stock-market collapse by imposing capital controls that were later reversed. Revisions to rules on foreign ownership have proven controversial. Western pharmaceutical companies also protested Thailand's recent suspension of patents on drugs used to treat HIV/AIDS and heart disease.

Government officials have sought to downplay General Sondhi's apparent threat to seize private assets, saying they won't expropriate Shin Satellite. Instead, they say, they might buy it back.

Page: 1 | 2